Be careful of your news sources out there. Oklahoma Steve here gives us London UK news. There is really is no national real estate market. WHen it comes to homes, if you need a home, can buy one and want to buy, your choices are in a local area probably not far from your work. What is going on there is what matters. Even now, one town can be up, another down in some states. In NJ Montclair the sales rate is 5-6 months whereas in Belleville nearby the rate is 10 months to sell on average. The difference is 5 train stations and great schools in Montclair, no train and so-so schools in BV. Glen Ridge has one train station and number one school system in state and highest taxes and rate is 3-4 months.
Short sales always need work, can take months to complete and usually are no bargain in any sense of the word. Why are you waiting, out of curiosity? Or are you in limbo not knowing you have a deal or not?

I think the credits will either be extended or modified. It has driven many first time buyers into the market theat were previously "on the fence".
In regards to short sale purchase-The majority of the short sales that I have dealt with(from the sellers side) have closed in around 60 days. When someone else is doing the negotiating with the bank, I can't say that the track record has been near as good.
When you find a property that you are interested in and see that it is a short sale-find out about the agent negotiating for the seller. How many have they done, what is their track record of getting to closing, what is their average turn time from offer to close? These type questions will help you determine if the property will close on time.

Johnny-Still unknown if the incentives will be continued into next year. But, if you are ready to purchase, thisis an excellent time to buy. There tremendous values available. If you find a short sale that meets your needs, go for it--but I would not plan on it closing in time for you to receive the current $8,000 tax credit. You are likely to save much more than $8,000 in the current market, if you are careful and work with someone qualified to help you find those values.

Valerie Castellana

House dip to last two more years

http://www.cityam.com/news-and-analysis/kuryy5iz4f.html

You might want to look for other bargains .Short sales are not the only way to buy a bargain home.No one knows if the date will be extended. But if you are saving much more than $8000 then it should not matter. I hope you are also aware of other guidelines like income .to qualify for credit

Johnny,

As you are aware, in order to receive the $8,000 tax credit, you must close on your qualified purchase by November 30, 2009. Since short sales take a considerable amount of time to navigate, you may be pushing the timeline. Hiring an experienced Realtor that is knowledgeable in short sales and the required filings will greatly help you through the paperwork process. It is extremely important that the first round of paperwork go through perfect. That's where experience pays off. Remember that as you get closer you get to the deadline, more pressure will be created by those trying to squeeze in at the last minute. This may bog down the lenders and create a significant backlog. If you are considering utilizing the tax credit, act quickly and prudently.

One last note, if you are hoping for an extension of the tax credit, there is nothing to report.

Regards,

Joe Romano, REALTOR - 904-540-6612
joe.romano@prudentialnetworkrealty.com
Prudential Network Realty
Jacksonville, Florida

Allen is correct. Today I found out that Countrywide is taking 6-months to respond, then additional time to get ready to close. A short-sale there would not make the Nov 30 deadline. Aug 1- Nov 30 = 120 days or 4 months. In addition, like anything else with a deadline, things get bogged down in a crunch for time. Not every short is this frustrating but most of them are.

The current dead line for tax credit is closed by December 1. Doing a short sale is possible but it depends on the lender and the situation with the seller a lot of which is not in your control. Many short sales take 90-120 days and that is with bank agreement. On the other hand they can be almost as easy as a normal sales transaction, but generally that involves local banks and not the national ones. If you are working with a Realtor, I suggest that you have them find out who the bank is and is the bank already aware of the short sale process on the property. If the seller and listing agent have done most of the leg work then it can be done. Otherwise there is risk even this far out.

Yes. Massive seller discounts provided discounts will be offered in a collapsing real estate market during the next leg down. Primary discount providers will be banks/reo's ditching 2 year vacant property from whithin their shadow inventory.

Today's buyer will be felling very ill for paying double what the home will fetch in 2010.

So many more will be underwater on their mortgage soon.

You make a decision to buy on 3 things: Do you need a house? (You have no place to live) Do you want to buy a house? (some people like renting for many reasons) Can you buy a house? Credit scores 700 and up, 10-15-20-25% down payment depending on your income situation and the property type). The $8000 tax credit probably fits into the 'can you buy' part. It will help buy new appliances, fix a few things. The money comes in 2010 when you file your taxes for 2009. If you can answer Yes to all three questions, I do not beleive it makes a lot of difference when you buy; now or 2010 or whenever the market for houses rises again. In addition, you should examine closely the market where you want to live. Believe it or not, some local markets are already showing increased prices. Most are not of course.
If you think about it, the purpose of the tax credit was to induce buyers to take action now- 120 days until Nov 30. If everyone thought it will continue into 2010 or be repeated maybe at a higher level, the intended effect now would be lost. Its effect is also supporting prices now. Prices may decline when Nov 30 arrives simply because the $8000 credit is not available any longer. What if the hosue you want declines more than $8000 the first week of December? Are you a gambler? Conservatives hope Obama fails. They harrangue him every day. How do they feel about you? If he fails so do you. Friends like that we don't need. IMHO of course.

I think Jared's thoughtful and insightful (and informed!) response is right on.

Predicting Congress seems to be a really risky spectator sport.

Predicting your own reactions to make a choice, then discovering later you acted at the right/wrong time should be easier. They say a hang glider pilot would rather be down here wishing he were up there than up there wishing he were down here. It depends on what happens to your environment after you commit.

Are you risk tolerant? Do you regret lost opportunity more than you regret commitments gone sour?

In any case, you're faced with what the management theorists call "decision making under uncertainty." And you have a lot of uncertainty. So it's a crap shoot with your eyes closed. You have no idea what the outcome will be, so you need to evaluate how you will "feel" about any unpredictable outcomes.

How's that? About as concise as Congress' plans?
-Lee

I agree with Steve.

Does anyone think the 15k will likely be passed? My guess is no, but I'm no Washington insider

Why are you worried about a tiny $8000 now when 2010 will see significant price declines in real estate?

Do you really think that housing will increase in price next year or the year after?

Inquiring minds would love to know.

Again:
High sustained unemployment.
High sustained inflation in food stuffs.
Super indebted American populace
No economy to speak of
Left field swine flu or worse potential
=
much lower home prices and much more impoverished citizenry.

As a real estate professional we are unsure if the government will be extending the $8000 tax credit to first time home buyers, I know that the National Association of Realtors would encourage Washington to extend the tax credit for 2010.

Dear Jonny,

As noted in other answers, no one knows if the credit will be extended, however, I believe the improving market will make it less likely that congress will extend it. I think the pressure will shift to be move conservative with tax dollars as the economy and housing show improvement. The time issue with purchasing a short sale is after the owner signs the contract you have to get approval from the lender and how long it will take to get that approval is unpredictable. I have heard of it taking as short as a week and as long as a year. All things being equal, I would purchase a non-short sale over a short sale. However, if the right home and price are a short sale, then leave your self the opportunity to nullify the contract if the bank does not approve within a reasonable time period and move on to something else. There are plenty of opportunites in the market place. I also agree with comments that the credit should not be an overriding influence on your actions, but it is a nice bonus if it works with you purchase plans.

John Nash

There is a large debate on what to do with the first time home buyers credit. There are a couple of different things that are being tossed around...one is to extend the home buyers credit and the other is to up the amount...it is more likely that the government would extend the credit...however; you have to be careful because you do not want to miss the boat....the government is always giving things and then taking them away...so, it will be interesting to see what happens. A short sale can close in most situations within 30 days. Usually, the response back in my experience has not been longer than a week. As long as you close by 30 November you can still get the credit this year.

Johnny,

I have been wondering the same thing. I am considering buying, but have backed away from my initial feeling of being rushed into anything because of the tax credit. My thoughts are that the housing market in general is like any market and factors such as tax incentives and interest rates effect where prices are. If rates suddenly rise and all tax credits are eliminated, there wouldn't be anymore buyers, especially in the first time home buyer, entry level property category. Therefore prices would have to fall. Of course I am describing an efficient market theory and each market is different, so the key is to take advantage of inefficiencies. In my opinion, at least in the NYC market, entry level priced homes are still over priced and these prices are being maintained by favorable interest rates and tax credits. Part of me wants rates to go up a bit and the credit to go away just so some of these developers would be forced to drop prices significantly. Right now I think they are squeaking by with just enough sales to keep prices inflated.

Good question, Johnny! Short sales can close sooner than four months, either by having a pre-approved price or your offer can be structured to end on a date that you choose. If a timely answer from the third party lender is not forthcoming in 15, 20, 30 days (whatever you choose), cancel that contract and select another property. It's still a buyer's market here in central Florida. There are plenty of homes to choose from and sellers are motivated. Buy now, make a reasonable offer, and don't lose out on a tax credit that may or may not be extended!

HR 2801 is currently under Committee review in the US Senate. Please call or write your representatives and ask your friends and colleagues to do the same.

-It would extend the $8,000 credit to January 2011.
-The bill expands the credit to all buyers, not just first timers.
-It eliminates the income restrictions.

It all depends on how the last quarter of the year goes. Our current administration will most likely consider exending the incentives "but" the million dollar question is what are the mortgage rates going to be? If you take the known from the unknown, we know the current rates, the current incentives that are being offered by the feds. Given all that and the anxiety that sellers are feeling I smell blood on the streets which makes it a great time to buy. If for whatever reason you can't purchase now, you might want to consider rent with the option of buying. That might limit the location that you'll be living in but you'll take advanate of the current incentives, rates etc.. Let's look at the unkonwn which is 2010, are the rates going to go up, and if so how much? Are the feds going to extend the incentives to attract buyers? We don't know, if you need to wait so be it but have your ducks in line. Get your financials ready, eliminate your debt, have all your records together, and please lock in a rate when you're ready to move!!! Good luck!!!!

There are proposals to extend it, to increase it, and to extend it to all buyers. No way to tell what will pass. If you see something you love, at a short sale price and with these interest rates, it is still a real bargain.

I think Jarrod's answer is right on here. As a real estate attorney, I have seen the market rise in my area recently (more demands, more purchases, etc). However, I am also fairly confident (based on nothing more than a hunch) that the incentive will be there for YEARS to come. I say this because there is a decent lobby in Congress and there aren't many mainstream arguments against the incentive (at least not loud arguments.) IN any case, forget the 8k, if you've got good credit, ample downpayment amounts (FORGET FHA) and some cash left to spare and you're ready to do it, then plunge on in. If you're on the fence, I wouldn't let the 8k push you in the direction of buying.

None of us knows for sure what kind and if any incentives will be offered in 2010 and none of us knows where interest rates will go for that matter--with that said, how badly do you want this property -- will you be happy living there -- without knowing the specifics of this particular short sale, keep in mind you may be getting a great bargain already that may not exist next year. The decision to purchase is entirely yours.

Anna

Hi Johnny,

Probably the government is not going to announce any tax incentive right now because they want the purchasing to continue and do not want folks to put it off because of next year's program. If you like this house, are ready to move forward make the offer with a contingency that the lender has to approve within 30 days because you want the tax incentive program. This way you can use it for leverage and good luck to you!

Not true- There have been talks of extending the first time home buyer tax credit. Nothing solid, but it is being discussed. The NAHB, NAR, and select congressman/women have been discussing re-writing or extending for some time now. Link to article:

http://www.guampdn.com/article/20090623/NEWS01/906230314/Tax…

Also....don't let the tax credit deadline rush you into something you are not ready for. The $8,000 first time home buyer tax credit is an excellent incentive, but if you don't find the right home or aren't quite ready don't rush it! Think of the credit as a bonus or perk, and not as a neccesity!

If you are ready, have enough cash stored up, found the right place, and so on then go for it! Now is a good time to buy ,and the short sale process does take a while as Mike mentioned.

http://re.harborportal.com
http://www.cbgreatlakes.com/jared.hammond

Hopefully not. The gov't needs to stop propping up this illiquid market if they want a true correction and then fix.

I have been asking the same question. Apparantly there are a lot of proposals on the table for 2010. USA Today did an article a few weeks ago explaining some of the proposals...

"•A Senate bill to expand the tax credit to $15,000 for any home buyer regardless of income"
"•A House bill to keep the $8,000 credit in place until June 2010 and expand it to all home buyers...It also would provide a $3,000 credit to homeowners who refinance."
"•Another bill in the House...would extend the credit to all home buyers through 2010"

Here is the link the the article:
http://www.usatoday.com/money/economy/housing/2009-06-22-hom…

I qualify for the first time homebuyer incentive, but ideally it would be best for me to save up for another year before I buy. So I'm keeping my fingers crossed that they extend the incentive through 2010!

Hello Johnny,

As of now there isn't anything that speaks about offering a buyers incentive for 2010. If you are planning to move forward with your purchase, now is the best time for you to get the process started and ensure you make the December deadline. Purchasing a short sale can be a bit complex, so working with someone skilled in short sales will also help a great deal in moving things along in a timely manor.

Mike Stanley
315-664-2300
mikestanley@weichert.com